XED Flashcards
(6 cards)
1
Q
if the answer to XED is less than 1 what does this mean?
A
demand between goods is price inelastic(weakly related)
2
Q
if the answer to XED is more than 1 what does this mean?
A
demand is price elastic(strongly related)
3
Q
if the answer to XED is negative what does this mean?
A
the goods are complements
4
Q
if the answer to XED is positive what does this mean?
A
the goods are substitutes
5
Q
what is the equation used to calculate XED?
A
%changeQDa/%changePb
6
Q
what is thew definition of XED?
A
the responsiveness of quantity demanded for one good or service given a change in price of another
